Federal Authorities are Increasing Their Investigative Efforts to Combat Healthcare Fraud and Crimes

1. What is Healthcare Fraud?

Healthcare fraud is a serious offense at both the federal and state levels and can result in significant penalties, fines, and imprisonment terms.  It occurs when an individual or company defrauds the federal government, an insurer, or a federal or state benefit program.  Healthcare crimes can be committed by a variety of individuals including physicians, nurses, dentists, pharmacists, billing specialists, administrators, insurance companies, and even patients.  Those perpetrating the scheme often benefit financially as a result of the fraudulent behavior.  Therefore, it is heavily scrutinized by the federal government.  Further, in an era where the novel coronavirus is taking its toll on society and burdening the healthcare system, healthcare companies are placed at an increased risk of investigation and prosecution.  

The Federal Bureau of Investigation (“FBI”) is the primary authority for investigating healthcare fraud—a crime that it considers “a high priority.”  While the FBI has jurisdiction over both federal and private insurance programs, it routinely coordinates its efforts with the Drug Enforcement Administration (“DEA”) and the Internal Revenue Service-Criminal Investigation (“IRS-CI”) as well as state agencies and state Medicaid Fraud Control units.

2. What Are Some Examples of Healthcare Fraud?

The definition of healthcare fraud is broad and can be perpetrated in many ways.  Alongside its ample array of enforcement tools, this gives the federal government numerous reasons to investigate an individual or company for behavior indicative of healthcare fraud.  Examples of healthcare fraud are listed below:

• Billing a patient for services that were never performed;

• Billing a patient for inaccurate medical procedures compared to the actual procedures performed;

• Falsifying a patient’s record or diagnosis in order to bill for services not necessary;

• Conducting medical procedures on a patient that are not medically necessary or needed;

• Improper coding of medical procedures with the intent to increase reimbursement (e.g., upcoding);

• Billing one procedure to the patient as if it were separate billing codes in order to increase reimbursement (e.g., unbundling)

• Fraud involving government programs, such as Medicaid and Medicare fraud;

• Insurance frauds such as using someone else’s name to receive their coverage;

• Prescribing drugs that have no medical purpose or forging a prescription either for a patient or by the patient;

• Accepting kickbacks or referrals.

3. Federal Statutory Liability for Healthcare Fraud

The federal government relies extensively on U.S. Code § 1347 when investigating and prosecuting healthcare fraud.  To prove healthcare fraud under this statute, the government must prove beyond a reasonable doubt that the individual or company:

“ . . . knowingly and willfully executes, or attempts to execute, a scheme or artifice—

(1) to defraud any health care benefit program; or

(2) to obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any health care benefit program,

in connection with the delivery of or payment for health care benefits, items, or services.”

Importantly, under this statute, an individual or company need not have actual knowledge or the specific intent to commit healthcare fraud. 

Section 1347 is a powerful weapon in the government’s arsenal to combat healthcare fraud, abuse, and other healthcare crimes.  Under this Section, the federal government does not need to prove the defendant’s intent to defraud the government.  An individual or company can be prosecuted for healthcare fraud if they are merely aware of the fraudulent scheme or willfully ignorant as to its occurrence.  This broad statute heightens the risk of investigations and can lead to severe fines and imprisonment terms.

Individuals and companies found to have engaged in healthcare fraud, abuse, or other crimes can also be investigated and/or prosecuted under the Anti-Kickback Law (42 U.S.C. 1320a-7b); the False Claims Act (18 U.S.C. 287); Aggravated Identity Theft; and Federal Conspiracy (18 U.S.C. 1349).

4. Federal Government Recent Examples of Healthcare Frauds

Federal indictments involving healthcare fraud demonstrate the seriousness of federal authorities to prosecute these crimes.  Recently, on September 20, 2020, the Department of Justice ("DOJ") announced a nationwide fraud and opioid enforcement action against 345 defendants for submitting over $6 billion in false and fraudulent claims to federal healthcare programs and private insurers.  The defendants included doctors, nurses, and other medical professionals who have exploited the healthcare programs of the federal government as well as their patients for financial benefit.  Last year, in April 2019, the FBI and the Department of Health and Human Services Office of the Inspector General ("HHS-OIG") investigated and the DOJ prosecuted one of the largest healthcare fraud schemes that resulted in multiple indictments against 24 individuals responsible for over $1.2 billion in losses.  The alleged scheme involved the payment of illegal kickbacks and bribes in exchange for the referral of Medicare beneficiaries; fraud involving products that were medically unnecessary; and a criminal scheme operated by multiple defendants across international borders that defrauded elderly and disabled patients.

FBI healthcare fraud investigations reveal similar aggressive measures undertaken against individuals and companies in October 2020 alone, including a federal grand jury indictment unsealed on October 16^th against two medical professionals for conspiracy to violate federal anti-kickback laws; a federal criminal complaint on October 15^th against a licensed professional counselor for submitting fraudulent claims for services that were never provided; and a sentence of 70 months also on October 15^th against a pain doctor for conspiring to distribute controlled substances and for healthcare fraud.

5. How to Respond to an Indictment Alleging Healthcare Fraud

Do you need a healthcare fraud defense attorney?  The federal government and prosecutors will continue their ardent pursuit to root out all instances of healthcare fraud across the nation.  Defending yourself against an indictment or allegations of healthcare fraud requires both a prompt and proper response.  Below are key strategies to take for a comprehensive defense:

• Know your rights.  Understand that you have rights whether you are dealing with law enforcement authorities or federal government agents.  Do not speak or reveal information to any federal authorities—law enforcement and the government are legally allowed to use your words against you in a court of law.

• Retain an experienced healthcare fraud defense attorney.  Securing the legal services of a lawyer knowledgeable in the criminal justice system and healthcare fraud is an essential step in your defense.  An attorney will advise you on the viability of your case, how it is expected to proceed, and which arguments would give you the best defense.  An attorney can stay objective in the midst of uncertainty as well as reduce your stress and keep you informed.

• Start gathering documents in your defense.  This step can save your attorney time when preparing your defense.  Never destroy evidence, as this can have drastic consequences on your case.  Begin accumulating and preserving all possible evidence.

• Ask questions.  Do not be afraid to ask your attorney questions about your case.  Your attorney should be able to give you full and fair disclosure about which avenue to take, how to respond to an indictment, and how to secure the best outcome for your current situation.

• Be respectful.  Always be respectful and courteous with the government, their counsel, and all parties involved in your investigation.  It is unacceptable in a court of law to lose control.  Remember that your attorney is there to fight for your freedom and reputation.  Remaining calm, composed, and polite can go a long way in the eyes of the judge or jury.

If you have been indicted in connection with healthcare fraud, do not wait to hire an experienced healthcare fraud defense lawyer trained in healthcare-related frauds, abuse, and crimes.